CAMBRIDGE A2 HISTORY: HITLER'S ECONOMIC AIMS. Presentation contains: unemployment, deficit financing, autarky, the first and second year plan, reinflation, measures to reduce unemployment.

1. HISTORY CAMBRIDGE A2 (PAPER 4)
PRESENTATION 7
HITLER MODULE
2. HITLER’S DOMESTIC AIMS UP TO 1941
HITLER’S
ECONOMIC AIMS

2. UNEMPLOYMENT
Germany’s economy was in a mess when Hitler was elected Chancellor in
January 1933. Hitler and Nazi propaganda had played on the population’s
fear of no hope.
Unemployment peaked at 6 million during the final days of the Weimar
Republic – near enough 33% of the nation’s working population.
Now Hitler decreed that all should work in Nazi Germany and he
constantly played on the economic miracle Nazi Germany achieved.
This “economic miracle” was based on unemployment all but
disappearing by 1939.

3. UNEMPLOYMENT IN NUMBERS
January 1933 - 6 million
January 1934 - 3.3 million
January 1935 - 2.9 million
January 1936 - 2.5 million
January 1937 - 1.8 million
January 1938 - 1.0 million
January 1939 - 302,000

4. DEFICIT FINANCING
Hitler’s economic aims were unclear at first as his economic aims were
always second to his political aims so they had no coherent plan. His
policies were a response to any given situation.
Hitler’s first economic aim was deficit financing.
He wanted to spend money on public works which would in return
provide jobs for people because Hitler knew that he had previously
promised work to the millions of unemployed and knew that his
popularity was built on this promise.

5. Hitler starting work at Autobahn

6. AUTARKY
His second aim was autarky which meant economic self sufficiently.
This means that Germany would be free of any world trends such as the
Depression of 1929 and this was also made necessary by Hitler’s other
economic aims which was to get the economy geared to war.

7. Prisoner work–force in the
construction of the
Valentin submarine pens
for U-boats, 1944

8. THE FIRST YEAR PLAN
In 1933 Hitler made his first four year plans with Dr Hjalmar Schacht.
Schacht was the President of the Reichsbank and was later the economics
minister.
The first four year plan was aimed at cutting unemployment by giving
money to men aged 18-25 for building things such as autobahns in the
form of the Reich Labour Service.
Rearmament also meant that jobs were provided and also conscription
was introduced after 1935.
Women were forced out of work to provide more jobs for men and also
more state jobs were created in the expanding bureaucracy.

9. REINFLATION
Compulsory labour service for young also provided jobs and things for
them to do.
Inflation was also limited and controlled by the abolition of trade unions,
which were replaced with Robert Ley’s Nazi Labour Front, and controlling
wages and prices.
‘Mefo’ bills credit note that was issued by the Government of Nazi
Germany, from 1934 on, under the guise of a company named
‘Metallurgische Forschung’, or ‘Mefo’ for short.
They were a fundamental part of the re-inflation of Germany's economy
as it enabled the government to borrow money so they could fund the
aims of the plan.

10. CHOICES
The unemployed were given a very simple choice: do whatever work is
given to you by the government or be classed as “work-shy” and put in a
concentration camp.
Jews lost their citizenship in 1935 and as a result were not included in
unemployment figures even though many lost their employment at the
start of Hitler’s time in power.

11. REDUCING THE UNEMPLOYMENT
Many young men were taken off of the unemployment figure when
conscription was brought in (1935) and men had to do their time in the
army etc. By 1939, the army was 1.4 million strong.
To equip these men with weapons, factories were built (more off
unemployment).
With these measures in place the unemployment figure had to fall
drastically and many saw the Nazi figures as nothing more than a book-
keeping trick. But many would have been too scared to speak out against
the Nazis or pass negative comments on the published figures – such was
the fear of the Gestapo.

12. SUCCESS OF THE FIRST PLAN
The balance of payments deficit means that little foreign currency was
allowed so the New Plan of September 1934 gave the government control
of trade and currency. Priority was given to imports needed by industry
from abroad. Barter agreements were encouraged to avoid spending and
all buying was done with marks therefore other countries had to buy
back off Germany so a common market was created.
The first four year plan was successful because production was up, trade
became surplus and unemployment was down from 6 million to 1.75
million in 1935. However conscription and the rearmament means
balance of payments deficit and consumer industries in competition with
armament industries for cash, raw materials.

13. THE SECOND FOUR YEARS PLAN
Therefore Schacht wanted to slow down rearmament to make more
goods to sell abroad. This made him lose influence so he resigned in 1937
and was replaced by Walther Funk.
In 1936 Hitler worked with Herman Goering to create the second four
year plan.
The aim of this plan was the use of traditional and efficient industry to
prepare forces and the economy for war. This included autarky by
increasing production and developing ‘ersatz’ goods which were synthetic
substitutes for products, training the workforce and controlling trade.

14. CHEAP HOLIDAYS
This plan was a success as industrial production was up such as coal,
steel, aluminium and agriculture production was also up.
The unemployment was down to 200,000 and the benefits from the ‘kraft
durch freude’ meant cheap holidays and other leisure activities.
Cheap holidays and the offer of them was a good way to win the support
of the average person in the street.
A cruise to the Canary Islands cost 62 marks – easily affordable to many
though most cruises were taken up by Nazi Party officials. Walking and
skiing holidays in the Bavarian Alps cost 28 marks.
A two-week tour of Italy cost 155 marks.

15. THE VOLKSWAGEN
The Volkswagen – People’s Car – was designed so that most could afford
it. The Beetle, designed by Ferdinand Porsche, cost 990 marks.
This was about 35 weeks wages for the average worker. To pay for one,
workers went on a hire purchase scheme. They paid 5 marks a week into
an account. When the account had reached 750 marks the worker would
be given an order number which would lead to them receiving a car.
In fact, no-one received a car. The millions of marks invested into the
scheme were re-directed into the rapidly expanding weapons factories.
This accelerated as World War Two approached. No-one complained as
to do so could lead to serious trouble with the secret police.

17. PROTECTING THE PEASANTS
However there were also failures of the plan.
These included autarky which had limited success as by 1939 30% of raw
materials were still imported as peasants were protected by Hitler, who
promised to protect them, and therefore stopped the development of
large modern farms which were better and more sufficient for the
economy than the smaller ones.

18. THE UNDEMOCRATIC PLAN
The plan was also undemocratic because big businesses were squeezing
out the small.
Cash was raised by forced loans mainly on big businesses and workers
weren’t producing arms fast enough so rearmament was slow.
Autarky also interfered with Hitler’s other policies e.g. towards women as
Hitler initially wanted them at home but later needed them in work as
conscription was forcing men into the army and leaving vacancies that
needed to be filled in factories and other jobs.
Some recovery was also on the way anyway possibly though the policies
of Hitler’s predecessors such as Bruning who was chancellor in 1930.

20. conclusion
So in conclusion Hitler’s economic aims were successful in the form of
autarky which was accomplished in spite of economic expansion Germany
had not increased her dependence on imports.
A lack of planning meant that Germany was not geared for total war meant
that Hitler’s economic aims were also unsuccessful.
In the end German economy would not afford both the ‘guns and butter’
which meant the rearmament and higher standard of living.